• A 6.7% decline in cryptocurrencies in August indicates a slowdown rather than a collapse, with increased profit-taking without signs of panic selling.

  • Analysts see altcoins approaching the 'breakout zone', indicating an early positioning before a return of broader momentum.

  • Experts warn that selling now may miss out on recoveries, with the possibility that the overall noise is short-lived and sentiment stabilizes.

The market capitalization of the cryptocurrency market in August did not continue to achieve new highs as it did in July. The rallies stopped with the awakening of long-dormant whales and traders' tendencies towards profit-taking.

This raises an important question: Should investors sell in August and wait for new lows? Recent analyses from experts provide deeper insights.

Why selling in August could be a big mistake

Compared to the market capitalization peak of $4 trillion in July, the market corrected by 6.7% to now reach $3.67 trillion.

Although this is not a major correction, new developments in August have raised concerns. These developments include the awakening of whales, slowing ETF inflows, renewed tariff pressure, and a rebound in the DXY (US Dollar Index). Together, these elements raise fears of a stronger correction in August.

However, for Bitcoin, the latest reports from Swissblock view the recent price decline as a positive phase. The pullback is seen as a necessary cooling after the previous price surge.

The report focuses on two key indicators: realized profit/loss (PnL) and 7-day SOPR (spent output profit ratio). Both indicators are declining, but not worryingly.

  • Realized profit/loss for Bitcoin (PnL) against SOPR over 7 days.

  • Swissblock indicated that 'this correction is a healthy cooling, not a structural weakness. Realized profit (PnL) is sharply declining, and the intensity of selling is low. SOPR is gradually decreasing, not in a crash manner. Investors are taking profits, not exiting in fear - they want to sell at a higher price. This is a constructive reset.'

  • Although the report does not forecast a specific price level for Bitcoin's recovery, other analysts believe that BTC may correct to around $95,000 before recovering.

    The market capitalization of altcoins (TOTAL3) has fallen by over 10%, decreasing from $1.1 trillion in July to $963 billion in August.

  • However, a report from Altcoin Vector confirms that altcoins remain very promising.

  • Boxes of altcoins.

  • The report uses a quadrant chart that divides the altcoin cycle into four stages. Since July, the chart has moved counterclockwise and is now heading towards the 'breakout zone'.

  • According to Altcoin Vector, 'smart capital is rotating here, before the public sees it. Momentum is shifting, structure is stabilizing. This is not a breakout: early positioning begins now.'

  • Analyst VirtualBacon also explained why selling in August could be a costly mistake.

  • He acknowledged that while some events may seem concerning, there is no need to panic because:

    • The tariff announcement on August 7 may just be short-term noise, similar to previous events.

    • Weak labor data may increase the Fed's chances of lowering interest rates.

    • The US Treasury may withdraw $500 billion, causing short-term volatility but not a full liquidity crisis.

  • Furthermore, market sentiment has calmed. In July, it was in the 'greed' zone, but it has now retreated to the 'neutral' zone. Since February, the market has not entered a state of 'extreme greed', which is generally considered the ideal time to make selling decisions.

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